Now, why this pressing need for raising internal prices? Elementary: cheap gas thwarts technological progress. As Anatoly Chubais, head of Russia's Unified Energy Systems, reminded the public in a recent TV appearance (it is not Chubais's discovery, of course, but a commonplace among theoreticians and industrialists alike): as long as gas is cheap, there is no incentive to replace ancient technology in the energy producing sector; installing new technology (which would represent, roughly, a fifty percent saving of resources in power production) is more expensive than burning cheap gas. In a truly market economy, who would do a stupid thing like investing in the future?
[WS:] That is how I look at the energy price increase here in the US: $3+/gallon for gasoline (I have a Prius hybrid, and take a bus to work, he he he) and 72% electricity rate increase due in a month or two, which causes quite an uproar in MD. Price hike is the only way to force the suburban fatheads to get their fat asses out of their SUVs, get rid of their heated swimming pools, and swap their plywood MacMansions for more energy efficient houses.
BTW, $3/gallon is not that bad at all in inflation adjusted terms - I think it is comparable to $.081/gallon in 1975. Europeans pay about $4.50/gallon. Wake me up when it gets to $5/gallon. http://zfacts.com/p/35.html
Wojtek